7 Apr 2015
Tomorrow’s EIA numbers to show another rise in oil stocks – BBH
FXStreet (Barcelona) - Mark Chandler, Global Head of Currency Strategy at Brown Brothers Harriman, comments on the key developments and shares the key events ahead for oil market.
Key Quotes
“Oil prices are heavier today, paring yesterday's substantial (~6%) gain. Those gains appeared fueled by the realization that an increase in Iranian oil exports is still several months off at best. Citing increased demand, Saudi Arabia announced a reduced discount to its Asian customers next month.”
“Other producers are expected to match suit. At the same time, a slowing of US rig shutdowns, inventory builds, and an actual small decline in US output (week ending March 27) also encouraged ideas that a bottom in oil prices is being carved out.”
“Speculative positioning in the futures market (the reporting period through March 31) saw shorts cover almost 18k contracts (each contract is for 1000 barrels). It was the second largest decline of the year and left 289.3k short contracts in speculative hands.”
“The gross longs added 2.4k contracts to 516k contracts. Before prices began to plunge last July, the gross longs stood at 548k contracts. They had fallen to almost 400k at the end of November and have been rising since then.”
“Genscape, a key provider of intelligence from the oil sector, reported yesterday that oil supplies at Cushing, Oklahoma, which is a key storage facility for the delivery of the futures contracts, fell between March 31 and April 3.”
“Tomorrow the government (EIA) will release its estimate. The consensus expects oil stocks to have risen by 3 mln barrels. Some investment houses are forecasting US inventories and production to peak this month.”
“US oil stockpiles have increased by an about 86 mln barrels this year to 471 mln. This has spurred speculation that storage capacity is being absorbed. Rising prices for storage is a key way the scarcer resource is being allocated.”
Key Quotes
“Oil prices are heavier today, paring yesterday's substantial (~6%) gain. Those gains appeared fueled by the realization that an increase in Iranian oil exports is still several months off at best. Citing increased demand, Saudi Arabia announced a reduced discount to its Asian customers next month.”
“Other producers are expected to match suit. At the same time, a slowing of US rig shutdowns, inventory builds, and an actual small decline in US output (week ending March 27) also encouraged ideas that a bottom in oil prices is being carved out.”
“Speculative positioning in the futures market (the reporting period through March 31) saw shorts cover almost 18k contracts (each contract is for 1000 barrels). It was the second largest decline of the year and left 289.3k short contracts in speculative hands.”
“The gross longs added 2.4k contracts to 516k contracts. Before prices began to plunge last July, the gross longs stood at 548k contracts. They had fallen to almost 400k at the end of November and have been rising since then.”
“Genscape, a key provider of intelligence from the oil sector, reported yesterday that oil supplies at Cushing, Oklahoma, which is a key storage facility for the delivery of the futures contracts, fell between March 31 and April 3.”
“Tomorrow the government (EIA) will release its estimate. The consensus expects oil stocks to have risen by 3 mln barrels. Some investment houses are forecasting US inventories and production to peak this month.”
“US oil stockpiles have increased by an about 86 mln barrels this year to 471 mln. This has spurred speculation that storage capacity is being absorbed. Rising prices for storage is a key way the scarcer resource is being allocated.”